NYRA Chief Blasts Attempts to Curb ADWs

The head of the New York Racing Association has issued a stinging indictment against the state’s offtrack betting corporations and said any attempt by New York policymakers to place limits on out-of-state advance deposit wagering will end up hurting racing in the state.

NYRA president Charles Hayward, in testimony submitted Oct. 11 to a senate oversight panel, said New York’s OTBs have witnessed “questionable viability and solvency” and have a track record of “parochial” decision-making that has only hurt themselves and pushed bettors to out-of-state ADW operations.

The written testimony submitted by Hayward included a renewed push to let NYRA take over the operations of the shuttered New York City Off-Track Betting Corp. Hayward submitted written testimony because he was unable to appear last week in person before the senate racing committee, which held a hearing on Long Island to address the racing industry’s future.

Hayward also urged lawmakers to go slow in embracing OTB proposals to limit wagering by New Yorkers on out-of-state ADW companies. He said NYRA expects to receive $28.7 million from those ADW operations in 2011.

“The imposition of additional regulatory burdens, fees or tax payments on out-of-state ADWs would necessarily result in a decrease in the payments those ADWs make to NYRA and the NYRA horsemen,” Hayward said.

New York OTBs have long maintained that revenue-sharing payments they must now make to NYRA should be lowered. They point to NYCOTB’s collapse and the bankruptcy reorganization status of Suffolk OTB as proof of a failed system. Further, they want the legislature to crack down on what they say is the loss of hundreds of millions of dollars in wagering to out-of-state ADWs, which do not have the same regulatory burdens as the state’s OTB corporations.

As seen for years in New York, the OTB vs. NYRA battle played out again in Hayward’s latest testimony before a legislative panel. The NYRA chief said NYRA has a “vested interest” in the operations of the OTBs because they provide a key customer base for the racing group. But he said NYRA has no say in any decisions made by the OTBs.

“The result is that NYRA is forced to rely upon an OTB retail network of questionable viability and solvency that is poorly suited to promote and grow pari-mutuel handle on the NYRA product,” Hayward said.

NYRA gets 2.5% on bets made through OTBs, but up to 8% from out-of-state ADW operators, he said. Any attempt to lower statutory payments the OTBs must now make to NYRA would “undermine the viability” of the corporation that runs Aqueduct, Belmont, and Saratoga racetracks.

“Limiting New York bettors to an in-state wagering platform may negatively impact an expansion by NYRA outside of New York state,” he said, adding that any move to limit bets on ADWs outside New York would amount to “poor public policy.”

Hayward pushed for what NYRA wants as the “exclusive” franchise for New York City. He said NYRA already has the legal authority to open simulcasting theaters in the city, and cautioned that there could be legal troubles if the state were to let another OTB run the former operations of NYCOTB.

The NYRA president added that OTBs in New York gave a push to out-of-state ADWs by blocking for years the ability of NYRA and the OTBs to stream live video of races over the Internet. He said the OTB’s “own parochial protectionism handed a significant marketplace advantage” to out-of-state ADWs.

“NYRA is not concerned about its ability to compete in the open market with out-of-state ADWs. In fact, the ADWs are very good customers for NYRA,” Hayward said in the testimony.